Officials from China, Europe and U.S. review planned container alliance
January 30, 2014 Category Logistics, Ports & sea transport
Maritime officials from China, the United States and the European Commission held their first joint meeting in December in Washington to review the proposed P3 Network, a pooling arrangement among the world’s three largest operators of container vessels. Denmark-based A.P. Moller-Maersk Group, Mediterranean Shipping Co of Switzerland and French carrier CMA CGM agreed in June to establish the long-term operational alliance on East-West routes to optimize resources and lower the cost of container shipping. The alliance will operate a total capacity of 2.6 million TEU, initially using 252 large-capacity vessels on 28 loops on three trade lanes: Asia-Europe, trans-Pacific and trans-Atlantic. While the P3 Network vessels will be operated independently by a joint vessel operating center, the three shipping companies will continue to have fully independent sales, marketing and customer service functions. The P3 Network intends to start operations in the second quarter of 2014, subject to obtaining regulatory approval. Luo Renjian, Researcher at the Institute of Transportation Research under the National Development and Reform Commission (NDRC), said unlike ship-sharing deals among smaller-sized shipping companies, the establishment of the P3 Network will encourage European carriers to grab more market share from Chinese companies. “Battling overcapacity and fierce global competition, Chinese liners are struggling to make a profit. Meanwhile, the government has stopped offering subsidies for container vessels built in domestic shipyards,” Luo said. Chinese companies such as China Cosco Holding Co and China Ocean Shipping (Group) Co have urged the China Shipowners Association to raise concerns about the P3 Network and the impact on competition. The three shipping companies have a combined 37% of the global capacity for container vessels, the China Daily reports.
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